How can you increase your startup's profits?

Start analyzing operational expenses with labor allocation. Implement time tracking to sort how employees spend their hours and ensure their hours are spent on billable tasks. The better your understanding of allocation, the more effectively you can scope projects. Consult with any leaders throughout your org to evaluate the necessity of ongoing subscriptions. As contracts expire, cancel, modify, or renew as needed. Eliminate any products that are duplicative in nature. Example: your org doesn’t need Slack and Teams for communication. Pick one. For large orgs I recommend hiring a financial operations director to monitor this in an ongoing manner. For smaller businesses, the time spent from the owner is worthwhile.

Consider adopting a zero-based budgeting approach. Instead of basing your budget on previous spending patterns, start from scratch and justify every expense.

The first step is to be methodical with tracking and categorizing your costs into fixed (e.g., rent, salaries, insurance, etc.), variable (e.g., raw materials, comissions, advertising, etc.), and one-time expenses (initial startup costs, training programs, legal fees, etc.). Regularly compare these numbers against a well-structured budget, meaning you should have some detailed financial plan that outlines your expected revenues and expenses for a specific period of time. This lets you see what your plan was compared to what your reality is. Periodically reveiew your expenses and benchmark them against industry standards to try to identify opportunities for improvement.

AI algorithms can analyze your expenses at a granular level, identifying areas where savings can be maximized. This approach goes beyond traditional categorization and explores expense patterns and anomalies.

Drastically Reduce Cost on Rent as a Startup When we started JobHouse in 2010, I was still in level 300 in the university and I could not afford an office. Even when we started a full recruitment service from 2013 rent cost in Accra was out of our reach. To overcome this, I arranged with a partner firm located in a good part of the city. The receptionist at this partner firm also served as the receptionist for our company, receiving our calls, scheduling appointments and organizing things. I paid a small fee per month to keep things going. In all, we saved over 80% compared with getting our own office space. It was until 2015 before we rented our first office space. That's 5 years after inception. By this time we have become stable.

When taking a look at pricing strategies, it’s important to look at the customer journey. How does a customer get to your top tiered price? Is there a natural progression through upselling and bundling other products that you offer? Is there a tiered or usage based model where the greater outcomes your customer sees, the greater their account value? When communicating the pricing changes, it’s not only important for customer facing teams to outline the benefits and outcomes of your offer, but using the principle of loss aversion (I.e what they stand to lose by not using your solution) can be incredibly powerful and persuasive.

Instead of solely focusing on your costs, base your pricing on the perceived value your product or service provides to your customers.

AI algorithms can analyze market conditions, competitor pricing, and customer behaviors in real-time. This approach allows you to adapt your pricing dynamically, optimizing for maximum revenue while maintaining competitive positioning.

Ad hoc price increases is certainly one avenue to follow but it would not be the first action. 1. You need to re-visit how the product and pricing strategy was set up. 2. Monitoring performance should highlight what is working and what is not. 3. Understand what the key variables are and why they are driving different than forecast results. 4. Review strategy which may include increasing pricing.

Hands down, the quickest way to increase revenue is to raise prices. It is the definition of generating more revenue without increasing work or costs. If you’re not targeting the top of your market it is worth asking why. Once profits are coming in and your cashflow is robust, there will be a plethora of opportunities to serve different niches and offer lower priced products and services. But if you start by targeting a low end market, unless you have the capital and reach to establish a broad-appeal product or service you will always struggle to be profitable.

Having a clear target customer is vital to all startups. As a general rule retaining existing customers is the most cost effective strategy. The exception would be where these customers are unprofitable. Startups should use data to ensure that they know their customers.

Retaining customers is important, but remember the 20/80 rule, where 20% of your customers would be responsible for 80% of your revenue. So always review your customers, see how provides the least revenue but takes most of your time with support requests or just basic questions and feel free to let these customers go.

Retention is an area often neglected but it is as important as recruitment of customers. Understanding your customers and exceeding expectations should be really high up on a list of worthwhile profit making activities for any business.

Enhance trust and transparency in your customer relationships by utilizing blockchain technology to secure customer reviews. This approach ensures that customer reviews are trustworthy and cannot be manipulated.

The easiest way to earn money is from retaining your customers. Ask for their feedback, maintain regular touchpoints and show them that you care. Also, provide them with an opportunity to help sell your products to their peer group and allow them to generate income through fully automated affiliate schemes by doing so.

Explore emerging markets as a strategy for expansion. Emerging markets often present untapped potential due to their rapid growth and evolving consumer behaviors.

Expanding into different markets, can add another zero to your valuation but don't spread yourself too thin too early. Focus on what you are doing well and provide the best possible service. Then, the expansion will come naturally, either to different niches or new geographies. But remember that if something works in one country, it doesn't meet it will work in any other location. Be aware of cultural differences in how people do business and consume content. That can vary.

Startups must ensure that all aspects of the business are scalable. This makes expansion more cost effective and financial performance easier to predict.

For startups, profit growth hinges on market expansion and strategic partnerships. Expanding geographically, targeting new niches, and innovating products/services can tap into new customer bases. Tools like Google Trends and BuzzSumo offer insights into market trends. However, channel partnerships amplify this growth. Collaborating with complementary businesses means shared resources, increased referral traffic, and enhanced credibility. While market expansion broadens the audience, partnerships provide direct access to potential customers, forming a potent strategy for boosting profits.

How can I make my business grow?” is a question small business owners ask. Is expanding your market the answer? Like most things, there is no one answer. Fast growth can result from being in the right place at the right time. There is no one business growth strategy. Growing your business is like baking a cake. There are many recipes. It’s a step-by-step process. If the recipe says bake it at 350 degrees for 30 minutes, raising the temp to 700 degrees doesn’t mean it takes half the time. The path to business success is the same. Pick a recipe. Know that if you change something, write it down to measure its impact on your bottom line. There are many ways to grow a business. Expanding your market is certainly one recipe for success.

Optimizing taxes is important, but more important is structuring your business correctly from the beginning. Think of the following: - the country where you are located - your target market country - the legal base for your LLC Always seek the help of a professional accountant or tax expert. You will need to spend some money at the beginning, but it will definitely help you in the long run.

Don’t leave taxes to chance. This is a complex area and unless a founder has the knowledge employing an expert will be a good investment.

Cash flow is king. You might have a great business and healthy revenues, but if you can't manage your cash flows correctly, you may run into problems, especially when your business grows bigger. Always have cash reserves in case a large customer delays payment or something unexpected happens. And keep a close eye on the money coming in and going out. If you are short on cash, consider options like invoice financing. Prepare and establish such relationships early in case you need to use their services on short notice.

Business failure is the same today as it was in 1918. Road deaths have reduced by 82% in the same period. Thats with a 50,000% increase in the number of vehicles on the road. Why do they fail? Cashflow. The single most important thing you can do as a business is manage your cash. Not your invoicing or P &L, you can be profitable on paper and bankrupt. Mind your cash, cash is king. Control your costs, understand your cashbook. Nothing else matters more. I am lucky, I have a CEO that is wonderful at cash. Never wing it, never guess, do it weekly at the latest. Work out your runway. No cash = no survival. You go to market for cashflow funding and you have serious problems. Get it right and you are in good shape. Don't ignore it

Most businesses fail due to cash flow issues. Maintain a cash buffer for unexpected liquidity issues or economic downturns. Negotiate payment terms with your customers and avoid working with customers who create significant negative cash flow cycles for your business.

A rule that I follow and teach my clients is that everything should be analyzed for necessity. Most of the time, certain expenses are not justifiable for projects or products you want to provide. As time is money, the devil will be in the time spent doing thing that are not billable. Streamline communication on all fronts so you spend as little time as possible going back and forth with clients as this can eat into your productive hours and your team's as well. Always track everything that you spend and earn, accounting is simply not sufficient to follow what's goin on in your company. Always try to find the answer to the question: Can I tell exactly to the last cent where is the company at this given moment?

Be very careful if you are tempted to pivot away from your original plan. If you multiply your own time expectation by 2.5 you will be near the actual delivery mark. The same math also works on fundraising. Often it's not a bad idea or initial plan it's just bad timing and over-expectations of others' performance.

You might have a great business and healthy revenues, but if you can't manage your cash flows correctly, you may run into problems, especially when your business grows bigger. Always have cash reserves in case a large customer delays payment or something unexpected happens. And keep a close eye on the money coming in and going out. If you are short on cash, consider options like invoice financing. Prepare and establish such relationships early in case you need to use their services on short notice. Cash flow is king.

9 reasons why startups fail: 1. Lack of market need. 2. Lack of product-market fit. 3. Poor execution. 4. Inadequate funding. 5. Mismanagement of resources. 6. Competition from established players. 7. Poor marketing strategy. 8. Founder burnout. 9. Lack of focus. Avoid these mistakes at all costs.

I focus on generating value for my end customers, few of the ways that i found effective - food for thoughts. 1) collaborations - work together with other entrepreneurs that have been there, done that and they are in need of your services or can join together with you. 2) Split your products - you can put an entry level product by targeting on your "future" market, market that is not ready for your bigger ticket item but love your product and don't mind getting a piece of it, can be an entry level price point - nurture your early followers into long term customers! 3) Upsize - this is different from item 2, it is selling a new product that can add value to your existing product. Like MacDonald asking you to upsize. Hope this helps!

Often startups can get distracted by lots of "noise". What others say. It won't work. Do this. Spend on PR. Spend on marketing. Spend on x, y, z. Often those saying these things are experts in those fields that you can spend with. However all of these things are not necessary on day 1, month 1, or year 1. Create your strategy and make tough decisions based on resources and budgets avaliable to get results. Look at what I call low hanging fruit opportunities to leverage first that are often low cost or no cost. Eg contact your network for referral or to support your first sales, get on free social media channels like LinkedIn, learn to use Canva to create great free imagery, setup a one page simple website to get going, look.fir grants etc.